In order to intervene in the securities markets, the investor must buy shares of companies listed on the stock exchange, with the objective of selling them after a more or less long period of time and obtaining good capital gains. In return, you will have to assume an appropriate degree of risk appropriate to your particular characteristics such as your investor profile.
Throughout the trading sessions, investors exchanged a large number of shares of multiple companies and different financial and industrial sectors, being verified that most of these shares correspond to the so-called ordinary shares, however, there are other types called preferred shares. Today for small and medium investors we will review what each of them consists of and what are their main characteristics:
- Ordinary shares: These shares essentially entitle the holder to receive part of the profits in the form of dividends, receive the proportional part that corresponds to him in case of liquidation of the company, preferential subscription of new shares and even bonds convertible into shares , To make an appearance at the General Shareholders’ Meeting and to vote on the different aspects that affect the company’s resolutions.
- Preferred shares: This type has specific conditions regarding the rights of its owners and may be nominative, redeemable or may even be denied the right to corporate vote. The issues of this type of stock are not so frequent in the stock market of the Spanish Stock Exchange.
Within the language commonly used in stock exchanges, we must know some terms or nicknames referring to many other values when you want to indicate some of their special characteristics, certain behavior or their level of risk such as the following:
- Defensive actions: Its main virtue lies in the stability of the prices of its shares, which do not suffer as others, the strong fluctuations of the markets which does not fully collect the rises in times of bullish movements, but in turn, Protect with lighter falls in turbulent times and price correction. The actions of utilities such as water, electricity, gas, consumption, etc. can be included in this section.
- Growth actions: Here we will reflect the companies of technology, innovation, the Internet, applications for telephony, etc. Its main characteristics are the possibility of offering high yields in a short period of time, the investor consciously assuming the high risk of the possible failure of the business project exposed daily to a great technological competition.
- Cyclical actions: They are those of companies linked to the current or near economic situation, which makes them thermometers of industrial activity or services, by increasing the demand for their products in periods determined by the economic cycles to That fit. In situations of the healthy economy and stable growth, companies such as construction, automobile, raw materials, industry, airlines or leisure companies tend to benefit.
For a better understanding of the classification criteria for the different types of shares, it is also advisable for the less experienced investor to know that there are shares of Blue Chips, large companies such as Telefónica, Santander, BBVA, Iberdrola … Consisting of having one Good economic strength, excellent market positioning, high stock market weighting, high liquidity or periodic distribution of dividends due to their usual and constant generation of profits.
Another type of actions that we must know are the so-called value stocks that are those of companies that at a given moment find themselves in excessively low prices for their economic numbers or financial situation. The value will seek to buy these types of shares near minimums with the hope that they will regain their normal prices after a medium-long period.
Lastly, there are stocks in the markets called chicharrones, which, as the name implies, do not offer more stock guarantees that belong to companies of small size, low capitalization, high speculation, strong price fluctuations and excessive suitable for new In risk, not investors.The latter, little by little through their daily learning and their constancy will be able to choose appropriately between the different.